Cape Coral, Fla., Building Permits in Decline
The number of single-family home permits issued in May dropped sharply in Cape Coral, Fla., even as the number of permits in the rest of Lee County stayed about the same.
The News-Press reports that Lee County issued 906 single-family home permits in May, up 4.7 percent from April and almost identical to the 901 issued in May 2005. However, in a sign of a declining Florida housing market, the number of permits issued in Cape Coral fell to 323 in May, a drop of 26 percent from 439 in April.
In May 2005, Cape Coral issued 724 permits, more than double the activity seen this year.
Fort Myers, meanwhile, issued 75 permits in May, up 15 percent from 65 in April. In May 2005, the city issued 63 permits.
The totals for Lee County include the unincorporated county plus the city of Bonita Springs and the town of Fort Myers Beach, which both contract with the county for permitting services.
So why are Cape Coral’s numbers down so sharply? In part, experts say, it’s because lots there are substantially more expensive than those in Lehigh Acres, the other area of the county where a large numbers of houses are being built.
“In Cape Coral the pricing has increased substantially for the lots, especially north of Pine Island Road… If you look at the price of a lot in north Cape Coral versus the price in Lehigh, whereas there didn’t used to be a difference five years ago, there is now,” said Michael Timmerman, Naples-based managing director for Florida at Hanley Wood, a company that collects and analyzes data for home builders.
County Community Development Director Mary Gibbs said about 75 percent of the county’s single-family permits were issued in Lehigh.
Timmerman said the Cape is also experiencing a sharper drop in real estate activity because it’s made up primarily of existing lots for which permits are easily obtained. By contrast, the rest of Lee has a lot of development in which new communities (and therefore lots) are created.
As a result, the surge in new Southwest Florida real estate being built last year is still keeping numbers relatively high, even as a number of market indicators are falling off.
The diverging Cape and Lehigh markets are evident to builders, said Fred Hermann, president of Cape Coral-based First Home Builders, the biggest builder of houses in Lee County.
“Last year we started to see it… We were starting to shift a little bit more to Lehigh. that’s just a simple matter of economics. It’s more affordable,” he said.
Overall, permits in Lee County spiked sharply last summer as home prices skyrocketed and builders went into high gear. The county’s relatively strong figures reflect the fact that a lot of new projects begun last year are just now being permitted — even amidst a burgeoning inventory of unsold properties on the market.
As Florida home mortgage rates continue to inch upward, it will be interesting to see if the county’s building permits — as well as sales — experience any sort of sharp decline.
